Brand Dilution There's been a few announcements this week in merger mania that has left me scratching my head. Sure, the Dow is at an all time high making stock transactions relatively cheap. Still, I think that synergies are more important unless these big conglomerates have something farther up their sleeves that they are not letting on. Granted there have been some M&A activity that makes sense: Coke buying out Glaceau , the Vitamin Water manufacturer. This makes sense as a line extension of "healthy drinking" as soft drinks are slowly falling out of favor from the more health conscious community. Further, Coke already has a wide distribution channel that the smaller Glaceau can take advantage of. Great deal here for both sides.
Then there's the line extensions that just make no sense whatsover. Even if he has something up his sleeve I really don't see how this ties into his brand. The brand I'm talking about is Trump. Donald Trump. After his successful runs in New York City real estate and Atlantic City casinos, the mogul has put his name on a few different items that didn't really reinforce his luxury brand status. Trump Water? Trump Vodka? (from the man who doesn't drink?) and the latest Trump Steaks. The Apprentice definitely reinforced Trump's image as a wheeling and dealing businessman but steaks? Perhaps vodka, water, and red meat will be given to the folks at the Trump Modeling Agency? I'm not sure, but I'm sure there's something behind this...or not, just another thing to slap the Trump name on (which at this point, might not be such a great thing - The Apprentice was not picked up by NBC).
Back into technology where I have a feeling that I know where Google is going with its acquisition of Green Border. Google is becoming Microsoft slowly and surely. It more or less has an entire suite of products and once those products become unreliant on IE and can stand independently on any browser, Google will have a portable desktop. And since you don't want other viruses you may have picked up while using your virtual desktop anywhere else, Green Border protects your home computer (note I didn't say PC). So that's Google's strategy it seems. Buy everything to make it a viable competitor to Microsoft. Google's about halfway there (market cap GOOG: 151B, MSFT: 295B).
The final question in my head (and please help me here!) is CBS. We covered CBS's purchase of WallStrip last week for $5 million. I speculated that CBS wanted to lock in the rights on Lindsay Campbell as their own Amanda Congdon. Ok, that makes sense, I think. But this morning, CBS announced their intent to buy Last.fm. We've spoken about Last.fm's loyal user base and I think its a great tool to find new artists and even old ones that you didn't know about. A StumbleUpon for music so to say. But I'm not sure how these two purchases really help CBS in the long run. CBS spokespeople have said that Last.fm helps them get that younger demographic that is so elusive to advertisers. Could be true. And perhaps this is where the synergies begin. Since the split of CBS and Viacom, CBS has all of the "old" properties, while Viacom retained the MTV's, Nickelodeons, Vh-1's, Paramounts, etc. Further as its old parent is suing YouTube, CBS has publicy said that YouTube has boosted its viewership. I think that these last purchases are probably more of a way for Les Moonves to stick it in Sumner's face more than anything else (since Sumner was so mad about the loss of MySpace that he fired Tom Freston). And for $280 million (half the cost of MySpace) why not?
Music Video Long Tail Ever since Chris Anderson's book The Long Tail came out, there's been a lot of news and buzz about it. Whether its the irony of Pirates of the Carribean setting a blockbuster record (since broken by Spiderman 3) or the reality of the Long Tail happening (Rhapsody, YouTube, etc), the Long Tail has become a part of our vernacular on the ability to pull up on demand any piece of content ever created. Amazon.com is already a Long Tail for books, iTunes could be a long tail for music, eBay is a long tail for other people's stuff, and Google is a long tail of the Web. Last.fm the popular social network music community, has launched a long tail not only for music but also (soon) for music video. Via their press release, "Last.fm aims eventually to have every music video ever made on the site."
Content creators out there can do nothing but rejoice over the Long Tail. After all, in the TV business, for example, while they make money on the initial run, real money is made in syndication, see Seinfeld, where advertisers are putting up new money for the space every time. In essence, Last.fm is providing a distribution platform for artists to be available when the consumer wants to see it. So, if someone mentions A-Ha's Take on Me video, you'll be able to call it up on demand and A-Ha (if they're still around) should be able to get a cut of the advertising served up against their content. Marketers should also rejoice over the Long Tail since content now from various eras or genres can now be identified. So, if you are trying to sell a product to a certain age group or demographic, music tastes could be identified to pinpoint that target. Radio has done a great job of that but no one has the time to sit through a radio commercial anymore. Perhaps, Last.fm could partner with Poptopus for a fairly interesting business model and since they have an embeddable player we wouldn't be stuck with the latest iteration of a revenue model that YouTube has come up with.
